The USD firmed slightly in quiet trade in the pre-European open Asia session, with staffing levels depleted by people taking the 'bridge weekend' vacation break following yesterday's May Day holiday. Market participants were also sitting on their hands ahead of the U.S. payrolls showstopper. EUR-USD tipped to a 1.3855 low, breaching Thursday's low on route, though this is still barely more than 40 pips below yesterday's high. USD-JPY edged higher, to a 102.44 peak, less than 20 pips up on yesterday's London closing level though sufficient to see the dollar clock a two-day high. The pair has been trading on a 102 handle now for two weeks now. Japanese data included March unemployment, which came in on the nose at 3.6%, and household spending, which beat forecasts for a 2.0% y/y rise with a 7.2% outcome. Japanese PM Abe said corporate wage increases have been encouraging. Elsewhere, AUD-USD posted a 0.9263-0.9280 range.

[EUR, USD]EUR-USD tipped to a 1.3855 low, breaching Thursday's low on route, though this is still barely more than 40 pips below yesterday's high. A rally yesterday stalled around 1.3890, shy of 1.3900 and the Apr-12 six-week peak at 1.3905. These levels, along with the major-trend high at 1.3966, made on Mar-13, form a key resistance zone. We still favour selling EUR-USD. As the Fed noted following its FOMC yesterday, the U.S. economy should pick-up through the year after weather-affected Q1 conditions. And while the threat of deflation has receded in the Eurozone, low inflation is likely to persist for some time, while weak confidence data suggest the ECB will still implement further stimulus measures, albeit not the 'big bazooka' policy effort that was hitherto seen as a possibility.

[USD, JPY]USD-JPY edged higher, to a 102.44 peak, less than 20 pips up on yesterday's London closing level though sufficient to see the dollar clock a two-day high. The pair has been trading on a 102 handle now for two weeks now. The pair is amid a broad sideways range, roughly contained within 100.00-105.00, which has been in place since early January. This stasis may persist for some time, though technical analysts will be marking this as a potential topping formation after the steep rally from levels around 75.0 that was seen during the second part of last year. Fundamentals seem more bullish, however, as Fed and BoJ policy paths are likely to become more divergent.

[GBP, USD]Cable settled back below 1.6900 after clocking a new-major trend peak of 1.6923 in the wake of the stellar manufacturing PMI data out of the U.K. yesterday., though this was offset by sub-expectations mortgage lending numbers and a particularly disappointing business lending decline, which will cause much chagrin for U.K. policymakers. We continue to target 1.7000. Anecdotal evidence points to upside risks for the construction PMI release today, and the services PMI next week should also come in at a robust level. Support is marked at 1.6875 and 1.6850..

[USD, CHF]EUR-CHF has settled around 1.2200 again, having recovered from the one-month low of 1.2142 that was earlier in the month. The cycle low of 1.2104 and 1.2100 are considered key support levels. While situation in the Ukraine remains a concern, and a potential supportive factor for the CHF, the threat of SNB intervention into its 1.2000 limit peg is helping to deter franc buying. SNB's Jordan repeated last Friday that the central bank remains committed to defending the currency cap.

[USD, CAD]USD-CAD gave up the chase above 1.1000 and slipped to around 1.0950. There are reports that oil settlement inflows have underpinned the Canadian currency in a relatively illiquid market. There doesn't appear to have been a fundamental driver. The Arp-9 three-month low of 1.0858 now swings back into view. Bigger picture, USD-CAD has been in a consolidation phase since late January following a four-month rally period from sub-0.9700 levels. We'd need to see daily and weekly closes below 1.1000 to support the idea that a trend reversal is on the cards.